Vietnamese President Likely To Purse Continuity in 2nd Term

The world is about to meet the real Nguyen Tan Dung. The Vietnamese prime minister was formally elected to his second term at the end of August 2011 by the country's legislative branch, the National Assembly. His new cabinet was elected recently. It is a lineup that looks substantially loyal to its boss, strong on continuity, and focused on making existing policies work.
Some analysts argue that Dung is a staunch conservative in a reformer's clothes. Others see a strong nationalist dedicated to economic reforms and social controls. At the end of his last five-year term, the results will define who is right about Nguyen Tan Dung.
Consolidated Bureaucratic Power
At 64 years-old, Dung, the former medical officer and decorated war veteran from his country's most southern province, Ca Mau, has survived a rigorous review process within the Communist Party of Vietnam, and has been given the opportunity to pick his team. The country's success or failure rests on his shoulders now. That was less true in his first term, when he was given much more guidance and forced to try to manage some more established deputies and ministers. After two cabinet reshuffles in 2006 and 2007, and now the ability to name his team, Dung has essentially consolidated bureaucratic power and is accountable for Vietnam's policy direction through 2015.
The party, ever cautious and conscious of the need to maintain control, has carefully organized leadership to ensure that if Dung falters, levers can be pulled to guide him, primarily through positioning Truong Tan Sang as president.
The other check on power is the political evolution of the National Assembly. The legislature has become more powerful over the last decade, but its role is to influence, caution, and recommend. It does not wield decisive power and has yet to contest any ministerial or leadership candidate put forward by the party.
Priorities of Dung
On August 3, the National Assembly confirmed by vote the appointment of four deputy prime ministers and 22 cabinet ministers. Much like the election of the senior leadership a week earlier, there were no surprises. A close look at the new ministers reveals a great deal about the priorities of Dung and the government.
The most important characteristics of the new cabinet are streamlining, continuity, cohesion, and youth. This is Dung's team. The prime minister was able to make his selections with far more freedom than when he was first elected in 2006, suggesting a continued strengthening of the prime minister's office. While General Secretary Nguyen Phu Trong of the Communist Party remains constitutionally the most powerful figure in the country, the dominance of the prime minister's office in the day-to-day affairs of government is set to continue.
Expect the new cabinet to demand the economy and state-owned enterprises to tighten fiscal controls and reform in its own image. The number of deputy prime ministers was cut from five to four and the number of ministries from 26 to 22. The stated purpose of these changes was to streamline the bureaucracy and eliminate redundancy among offices. These changes all reflect the government's goal of creating a more efficient and responsive executive branch.
Strengthening Regional Organizations
Continuity suggests a strong commitment to following through with existing policies dominated by economic reform, social control, and in foreign policy, strengthening regional organizations in Southeast Asia while deepening ties with strategic partners, such as the United States, India, and Europe.
Of the four deputy prime ministers, two are incumbents and two were promoted from posts as cabinet ministers in the previous administration. Seven of the ministers are incumbents and eight were promoted from the position of deputy minister. The remaining seven are anything but fresh faces. Five have moved from Communist Party posts to government positions, one was shifted from one ministry to another, and new transportation minister Dinh La Thang, 51, served most recently as chairman of state-owned PetroVietnam.
This is also the youngest cabinet in recent Vietnamese history, with an average age of 56. In his last term, Dung was among the younger half of the cabinet. While still relatively young, relative to his new team, he's now an elder.
A look at three key ministers--Thanh at Defense, Hue at Finance, and Minh at Foreign Affairs--reveals the pillars of Vietnam's policies going forward.
Incumbent minister of defense General Phung Quang Thanh, 63, received the highest vote total in the National Assembly with a resounding 97.4 percent. This support emphasizes an institutional deference to the armed forces and mandates a national resolve to take a strong stand on sovereignty issues in disputes with China in the South China Sea. Advancing defense and security ties with the Association of Southeast Asian Nations (ASEAN) and enhancing those linkages with the United States will be priorities. Vietnam has also just announced groundbreaking on a US naval research facility, the first new US military facility in Vietnam since the war.
Economic Adjustments To Rein in Inflation
Another theme is the National Assembly's growing concern with Vietnam's rising inflation and slowing economic growth. Legislators' anxiety was on display in the confirmation of former Finance Minister Vu Van Ninh, 56, as deputy prime minister with only 81.8 percent of the vote. This total was almost 10 percent lower than the next lowest candidate for deputy prime minister. Ninh's replacement at the Ministry of Finance, Vuong Dinh Hue, 54, received a strong 90.2 percent. As the former head of the Office of the State Audit, Hue is a no-nonsense leader, armed with facts and figures, mandated to correct the inefficiencies of large state-owned enterprises, prevent another debacle like the near collapse of state-owned shipping giant Vinashin, and oversee economic adjustments to rein in inflation and stabilize the dong. He will be joined in this effort by Nguyen Van Binh, 50, who was promoted from deputy governor to governor of the State Bank of Vietnam. Binh has made it clear that he'll continue the government's tight monetary policies, with reversing inflation his primary goal.
The new economic team may adopt severe short-term measures such as price controls. But such antimarket steps will need to be watched carefully as they could eventually undercut Vietnam's attractiveness as a destination for new investment.
Support for Rapprochement With US
One of the most critical appointments for US interests is the promotion of Pham Binh Minh, 52, to foreign minister. Minh received 94 percent of the National Assembly's votes. Minh is the son of Nguyen Co Thach, who served as foreign minister from 1980 to 1991 and was perceived to be an early leader in the support for rapprochement with the United States and economic reform. Minh inherited his father's pragmatism and openness to the West.
Minh's first posting in the Foreign Ministry was to the Vietnamese Embassy in the United Kingdom. In 1999, he was appointed deputy permanent representative to the United Nations, and from 2001 to 2003, he served as deputy chief of mission in Vietnam's embassy in Washington. All indications are that he will be a strong leader and advocate for continued deepening of ties with the United States.
Threats of Global Recession
As Dung and his new team begin to unveil their plans, they will be facing a challenging environment. Having plugged into the global trade and financial superstructure, Vietnam's relatively small economy (gross domestic product is near $100 billion) and developing institutions will be severely challenged by threats of global recession. Vietnamese citizens have benefited enormously from economic reform, and there is clearly no turning back.
Vietnam is also committed to leading within ASEAN and helping to support new regional security and trade architecture. Battles for influence and geostrategic hedging will whipsaw the process, and staying focused will a real test. The path ahead will be challenging. The true colors of Nguyen Tan Dung will be clear to see by the end of his second term.

China's Economic Strategy in ASEAN Countries

Economic relations between China and the Association of Southeast Asian Nations (ASEAN) have clearly become closer as China is now ASEAN's No. 1 trade partner and ASEAN is China's No 4 trade partner with a possibility to surpass Japan to No 3 soon. Not only in trade, investment by China's private sector and state enterprises in ASEAN countries has grown in a big leap. China now tops the investor list in ASEAN countries like Myanmar, Laos, and Cambodia, while ranking fourth for foreign investment in Thailand.
Regional Economic Trend
It is not a matter of coincidence or regional economic trend but the Chinese Government does intend to tighten economic ties with ASEAN under what I would call a "southward strategy." China began with its serious move southward in the year 2000, when Chinese and ASEAN were then fiercely competing in the world market. The China-ASEAN trade volume was not so big at the time. Then came the day when then Chinese Prime Minister Zhu Rongji wooed ASEAN to form ASEAN-China Free Trade Area (FTA). The Chinese Government has been seriously pushing for the FTA since then. The trade cooperation started with a gradual cut of import tax until the rate became zero in January 2010.
Chinese have paid frequent visits to ASEAN countries to pave the way for an army of Chinese investors. Chinese Prime Minister Wen Jiabao has visited almost all ASEAN members. Prospective fifth-generation Chinese top leader Vice President Xi Jinping has also visited Myanmar, Cambodia and Laos.
PBG Program
The Chinese Government has been using every stage, framework and forum available to continuously and seriously promote economic cooperation with ASEAN, including the push for the Pan-Beibu Gulf Economic Cooperation (PBG) program. Chinese Prime Minister Wen Jiabao has been pushing the PBG among ASEAN leaders since 2007.
As a Thai representative invited to join the Joint Expert Group for the PBG since 2008, I made the latest trip to attend the ratification of the feasibility study for the PBG early this month. I would like to cite the PBG as a case study for China's "southward strategy".
The prominence of the PBG is the participation by three key southern Chinese provinces of Guangdong, Guangxi and Hainan. The trade volume that the three provinces have with ASEAN represents one-third of the whole China-ASEAN trade. After the ASEAN-China FTA fully took effect in 2010, the trade between the three provinces and ASEAN has expanded as showed in the table above.
China's 12th Development Plan
For Guangxi in particular, it was designated by the Chinese Government as key player in China-ASEAN relations. Guangxi was officially declared Gate to ASEAN (not Yunnan as many think). It hosts China-ASEAN Expo on yearly basis in Nanning, the principal city of the province, since 2004. With conducing factors and guidance brought about by the government, economic ties between Guangxi and ASEAN have enjoyed a big leap. ASEAN has become Guangxi's No 1 trade partner. Businesspeople from Singapore, Malaysia and Indonesia have flocked to invest in the province. In the latest drive, China's 12th Development Plan targets injecting a mammoth budget of 2.6 trillion yuan in five years into the so-called Guangxi Beibu Gulf Economic Zone (GBEX) covering four key cities of Nanning, Fangcheng, Jinzhou and Beihai.
Some of you may wonder why it must be Beibu, a city bordering the South China Sea. Those who have well followed news on international politics and relations have asked me a hit question what the Chinese Government has in mind for pushing its "southward policy" through the realization of the PBG.
Of course, China does not expect to gain from the PBG only in terms of economy and investment. There are points about military strategies and security involved. China and some ASEAN countries have claimed their rights over overlapping marine territories in the South China Sea. Vietnam's Navy has gone so far as to have conducted a military exercise with live ammunition in the South China Sea recently. Vietnamese people have also staged noisy protests against China over the marine territorial dispute.
Role of Vietnam
Vietnam is sensitive to the issue in every aspect, even in the academic field. We members of the PBG panel of experts had to spend a long time to find a suitable name for the disputed marine border as the Chinese representative preferred the term South China Sea, while the Vietnamese counterpart wanted it changed to East Sea, the official term used by the Vietnamese Government. The Chinese expert would not yield to the Vietnamese counterpart's demand and it took several months for the panel to end up with just the word Sea (LOL) so as not to be biased towards any country.
The South China Sea territorial dispute and the push for the PBG could become boiling regional issues in the future. The Thai Government will have to come up with how to properly handle them. It will be certainly better for all parties concerned to cooperate than fight.

ASEAN 10 Plus 4 Framework

Ever since China began to open up to the outside world and carried out its reform, China has followed the path of an open-end regionalism. Such open-end regionalism can allow China to take the lead to establish the ideological basis of regional platforms. What open-end regionalism stresses is the inclusive of regional organizations. Such regionalism can be reflected on China's relationship with ASEAN (Association of Southeast Asian Nations) countries.

After the end of the Cold War, the relationship between China and ASEAN is a most successful case in all regional organizations. The relationship between China and ASEAN has also led to two other countries in Northeast Asia, namely Japan and South Korea to establish closer relationship with the ASEAN countries.

Open Process Evolution
How can G2 expand the basis of its own system? It will be an open process evolution. During this evolution, G2 may come out with different organizational structure. However, for effectiveness and convenience, G2 may also wish to use the ASEAN platform to develop the G2 structure. In other words, ASEAN can indeed expand its open-end regionalism to China-US relationship.

There are many reasons why ASEAN can become an interactive platform for G2. First of all, ASEAN has already formed its ASEAN "10 +1" mechanism. Built on this base, ASEAN now has the ASEAN "10+3" (ASEAN plus China, Japan, South Korea) framework. Now, the United States has openly said that it wants to "come back" (return to Southeast Asia). This means that ASEAN can come out with another "10+1" mechanism (ASEAN plus US) framework to include the United States.

Developing Enough Momentum
It is not difficult for the ASEAN "10+3 mechanism to extend and become an ASEAN "10+4" framework. During the initial stage, the United States may be reluctant to buy this concept. However, with East Asia gradually becoming the center of the world economy, the United States will also gradually develop enough momentum to enter this ASEAN "10+4" mechanism. The ASEAN-China Free Trade Area has already entered into force.

After a period of trial run, the ties between ASEAN and China will further be strengthened. This will give the United States great competitive challenge in the East Asian region. If the United States does not want to be marginalized in this region, the United States must make effort to institutionalize its presence in the Southeast Asian region.

Both ASEAN and Northeast Asian countries are facing a reality that the United States was here in the past; the United States is here now and the United States will also be here in the future. The importance of the United States to Southeast Asia (regardless if it is from economic or strategic perspective) is obvious. It is with good and great reason that the ASEAN countries would want to earnestly "invite" the United States to come back to Southeast Asia. In Northeastern Asia, Japan has proposed to establish a more equal relationship with the United States. If ASEAN does not consider the US factor, then the concept of an East Asian Community will be difficult to achieve.

US Shift Toward East Asia
East Asian regionalism is inclusive, which means it can include the United States. In the same token, if East Asian countries have recognized the existence of the United States, or to use the words of realism, there is no ability for the region to exclude the United States, they would have to consider how to "digest" the United States. It is like the US engagement policy on China with the purpose to "digest" China.

In fact, as the US focus begins to shift toward East Asia, the United States has more and more like an East Asian country. In such a case, the United States must be integrated into the Asian economic and security mechanism. The more the United States is excluded from this region, the more insecurity East Asian countries can become. The reason is very simple. This is because the more the region wants to exclude the United States, the more the United States will have the psychological fear of not becoming part of the same. The United States might find whatever means they can use to get involved in this region then.

Providing Economic Platform
First and foremost the proposed ASEAN "10+4" mechanism is an economic platform. In this regard, interaction on economic issues within such a platform is easier to carry out. Compared with other aspects of interaction, economic interaction is often not a zero-sum game. Economic interaction platform can even result in having positive effect on political interaction. At this moment, between China and the United States, these two countries face many trade disputes.

On the surface, although the China-US bilateral trade disputes are trade matters between the two countries, to a great degree, such trade disputes involve the whole East Asia's trade relationship with the United States. This is especially manifested in the aspects of the US trade deficit with China. It is difficult for regional countries to explain China's trade relation with the United States if we do not consider China's trade relation with other East Asian countries. If the US economic mechanisms can be integrated into the East Asian region, when the United States considers its economic interest, its economic concern will not so easily be politicized as what has happened now.

Possible Positive Impact
Economic integration will also bring positive impact to the ultimate security issue. The security issue between China and the United States is not just the problem between the two countries; it is also the security issue of the entire Asia. If China and the United States can, based on the proposed ASEAN "10+4" mechanism, to also nurture military confidence and build up a security cooperation mechanism, such security cooperation mechanism will allow peace in Asia to prevail and be protected, it will also provide solid foundation for global security.

The proposed ASEAN "10+4" mechanism itself can be an open end mechanism. Based on such principle, this mechanism can be expanded to include more relevant countries. It will be the ASEAN "10+4" formula.

US Invites Malaysia To Join Trans Pacific Partnership

US Ambassador to Malaysia James Keith (Chinese name Qi Jin Mu) pointed out that there was no further decision for Malaysia and the United States to proceed with another round of Malaysia-US Free Trade Agreement. Ambassador James Keith said that at this moment, the United States would focus on seeing the development of a more influential "Pan-Pacific Partnership Agreement" (Trans Pacific Partnership). He also invited Malaysia to join this new Pan Malaysian Partnership Agreement as one of the members.

The US envoy to Malaysia said both the United States and Malaysia have used almost three years to carry out the Malaysia-US FTA negotiations. Nevertheless, since President Obama became the US President, the US Government has reviewed the goal of its global bi-lateral trade ties with other countries and agreed on the formation of the Trans-Pacific Partnership" trade framework.

Ambassador James Keith will leave Malaysia on 15 March to take out new assignment in another country. James Keith will go the Afghan capital Kabul on 15 May to take up the new diplomatic post as the US Deputy Ambassador in Afghanistan.

Trans Pacific Agreement
US Ambassador to Malaysia James Keith said that countries that have already signed the Trans Pacific Agreement have included Singapore, Chile, New Zealand, Brunei, Peru, Australia, Vietnam and the United States. He added that this new trade agreement would not only strengthen the multilateral trade ties within the region the Agreement would also provide employment opportunities to many countries.

He said: "Pan-Pacific Partnership Agreement is a high quality trade agreement. We hope that more countries in the Asia-Pacific region can actively participate in this Agreement in order to open more multilateral trade markets."

Ambassador James Keith described the US bilateral trade relationships in a number of Southeast Asian countries as becoming increasingly complicated. As such it became necessary to develop a more transparent trade framework to boost and enhance regional countries' confidence in dealing with trade issues.

Ambassador James Keith also commented that the Association of Southeast Asian Nations (ASEAN) was an attractive regional framework. He said that if the United States could establish a trade agreement with ASEAN, both the United States and ASEAN countries should be able to reap many benefits. Such trade agreement between the United States and ASEAN should be better than the US bi-lateral trade ties with Malaysia or the US bi-lateral trade ties with Vietnam.

Ambassador James Keith also mentioned that US Trade Representative will visit Malaysia in the very near future. He hoped that the Malaysian Government could seriously consider such a suggestion mentioned by him.

Reaching Consensus on Many Issues
US Ambassador Qi Jin Mu said that Malaysia and the United States had gradually reached a consensus on many issues. These have included the fight against terrorists, the fight against weapons proliferation, export controls, global trade and topics such as religion and culture.

He said: "In the future, Malaysia and the United States will reach consensus on more issues. Both countries can share mutual benefits and can have many opportunities to get in touch with each other. This is a very positive development. I believe this US-Malaysia relationship will continue to develop even better and bring more benefits to both the nations."

The US Ambassador to Malaysia said that although on certain issues, Malaysia and the United States might hold different views but gradually the two countries will reach a consensus. As such Malaysia and the United States could expand bilateral ties in other related fields.

Ambassador James Keith also pointed out that Prime Minister Najib Razak would pay official visit to the United States to discuss global nuclear security issues. To him this was the best evidence to show that Malaysia and the United States have strengthened bilateral relationship further.

The US envoy added that US President Barack Obama and Malaysian Prime Minister Najib Razak have a vast space to strengthen Malaysia-US bilateral relations in the future because both the Malaysian and US Governments have kept carrying out reform for their respective country.

Strengthening Bilateral Ties
Ambassador James Keith said that during his years as US Ambassador to Malaysia, he was indeed very glad to see US President Obama and Malaysian Prime Minister Najib have respectively taken pro-active effort to strengthen Malaysia-US bilateral ties.

James Keith said: "Both countries have put in many effort to improve the bilateral ties in many fields. These include strengthening ties in the field of security, bi-lateral trade ties and people to people exchange. I am very happy about such development."